The results of recently completed diabetes complications and control trial showed that good glycemic control resulted in slower progression of the chronic complications of diabetes. These beneficial effects apply to patients with type 1 and type 2 diabetes. The goal of therapy today is to achieve good glycemic control to prevent the long-term complications of elevated glucose levels. Metformin hydrochloride has been successfully used for many years as an antihyperglycemic agent for type 2 diabetes. Metformin acts to lower glycemia primarily by inhibiting hepatic glucose production and also by enhancing peripheral glucose uptake. The most commonly used immediate release metformin used two or even three times a day dosing. A once daily dosing of metformin would be more desirable than multiple daily dosing. The novel biphasic oral dosage form is designed to slow the release of the drug, and to prolong its residence time in the upper GI tract. This new formulation provides the opportunity for decreased frequency of dosing. Decreased frequency of dosing results in the benefit of increased patient convenience and increased compliance. The purpose of this study is to determine the effects on glycemic control of several doses of the novel oral metformin administered once or twice per day versus placebo in patients with type 2 diabetes mellitus who have inadequate glycemic control with diet and exercise.